Insurance companies makes their money by betting on your losses – or finding a way around paying for them. And one big way to avoid paying for an insurance claim on a roof is to pay actual cash value rather than replacement value for roof damage.
What does that mean?
Basically, if you have actual cash value roof coverage, your insurance company will discount your roof claim and only pay an estimate of what your roof is worth. The older your roof, the more depreciation applies and the less your roof is estimated to be worth.
But the problem is actual cash value isn’t the same as replacement value. While your insurance company may determine that your roof is only worth $10,000, it may cost well over $30,000 to replace your roof after damage. What this leaves you with is a huge roof-replacement bill.
So how do you know if your policy only pays cash value?
First, you have to read the declaration page of your policy.
Then you should call your insurance agent.
Here is a tip.
Did your insurance company ask you how old your roof is? Did they send an inspector to look at your roof before writing the policy? These are two signs that your insurance company is not looking to replace your roof, but instead only cover the cash value based on the age and condition of your roof. If you have replacement cost coverage, the age and condition of your roof doesn’t matter.
So what do you do?
If you find that your homeowner’s insurance company only pays cash value shop around for an insurer that won’t limit your hail damage claims. Your pocketbook will thank you.
This article is brought to you by ASAP Roofing, a national leader in hail-damage, weatherization and exceptional customer service.